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Emergency rooms can earn hospitals revenue: study

Posted on: Wednesday, 12 July 2006, 08:35 CDT

By Kim Dixon

CHICAGO (Reuters) - U.S. hospital emergency rooms, frequently beset by too many patients and too few beds, can take in more money if they stop diverting arriving ambulances to other hospitals, a study on Wednesday said.

By putting in more beds and avoiding so-called ambulance diversion, a hospital could boost emergency-room revenues by 10 percent, according to the study of a 400-bed Oregon teaching hospital published in the Annals of Emergency Medicine.

"It's important that hospitals understand that decreasing ambulance diversion can translate into higher revenues," said John McConnell, who led the two-year study of his hospital's emergency room at Oregon Health and Sciences University.

Most emergency rooms are understaffed and overwhelmed with patients and unprepared to cope with a crisis such as a natural disaster or terrorist attack, the nonprofit Institute of Medicine said in a recent report. It also said diverting ambulances inevitably leads to unnecessary deaths.

But hospitals have been hesitant to add capacity because many emergency-room patients are among the ranks of the 46 million people who lack health insurance and may be unable to pay.

The new study is one of the first attempts to show the potential financial benefits to hospitals if they change course, the authors said.

U.S. hospital emergency room visits have risen steadily, jumping 26 percent between 1993 and 2003 to 114 million visits, according to the Institute of Medicine, which advises the government on health matters.

The Oregon study also found patients entering an emergency room by ambulance are less likely to be uninsured and more likely to be admitted to the hospital, than patients who walk in.

"That was a surprise to us," McConnell said. "The patients where a hospital makes a lot of money is the heart-attack (patient) who is then admitted," he said.

The Oregon hospital treats about 43,000 emergency-room patients each year, and midway through the studied increased bed capacity.

When beds were added and ambulance diversion dropped, the hospital gained about $175,000 in extra revenue per month.

A major limitation is the study didn't quantify the revenue lost from inpatient beds being used for emergency patients, Robert Williams of the University of Michigan School of Public Health said in an editorial in the journal.

"In simple economic terms, one patient is a sure thing and the other, a roll of the dice," Williams said.

Source: REUTERS

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